What is mining?

In the Web3 world, mining refers to the process of verifying transactions and creating blocks on a blockchain. Miners are putting time, energy, effort, money, and machinery into these efforts, so they should receive something in return, right?

Indeed! They receive rewards. These rewards look different depending on what blockchain network miners belong to. For example, in Bitcoin, the reward is currently 6.25 BTC, which gets halved about every four years.

Since miners incur significant expenses (equipment and electricity), it would be foolish of them to lie about their blocks. They would be missing out on the chance of receiving the rewards for mining (creating) blocks. This reward system, combined with the fact that many other miners are competing to create the next block, is what incentivizes miners to tell the truth (create legitimate blocks) and secure the blockchain. If they were to lie, the network would punish them.

Miners run software to solve a cryptographic math problem. Once a single miner is able to find the solution to the cryptographic problem, the other miners verify this, a process that completes validation of the block. In turn, this new block is added to the blockchain, and the successful miner takes the reward. The elapsed time between the creation of each block varies from blockchain to blockchain.

Mining is one form of validation that adds new blocks and secures the network. As a little refresher, a blockchain is a decentralized database maintained by many nodes that do not need to trust each other. But how can these nodes agree with each other? Through consensus mechanisms. Relatedly, how can these permissionless systems be safe from malicious attacks? Through rules that define who can participate in the network and thereby provide sybil protection against impersonation, such as Proof of Work and Proof of Stake (remember that PoW and PoS are NOT consensus mechanisms).

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